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Monday, 29 August 2016

7 Things To Do Before Investing In Property

When it comes to property investment, it is something most people think
about. It is probably the only business venture that is risk free once
it’s legit.Yet for many when push comes to shove, you get
stopped.It’s not surprising that a lot of people get overwhelmed by the
process and quit before they even begin. But it doesn’t have to
confound. Reality is, property investing is relatively
straightforward.To help you begin your journey, here are eight steps to
starting a property portfolio on a solid ground, without losing your
mind.1. Check your financesThis can be as simple as listing all your assets, including incomes and work out your expenses.This
will give you an idea how much cash you have available to invest. Don’t
immediately assume that you can’t afford to invest. As long as you have
a stable and reasonably good paying job with solid employment history,
you shouldn’t have a problem getting investing in property no matter how
small.

2. Set your goalsWhat are you looking to achieve?
What does success look like to you? Property investors generally invest
in property to secure their financial future or to be free to do what
they want, when they want it.In order for you to achieve your goals, you
must first articulate what your goals are. More importantly, you need
to set a deadline as to when you want to achieve these. Then you can
work backwards.For example, if you’re looking to replace your income and
retire on your investments within 10 years, you can start by creating a
10-year plan, broken down further to 5-yearly, yearly, bi-annual all
the way down to weekly timeline. This way you don’t get overwhelmed by
the enormity of the task.

3. Understand your attitude to riskYour risk profile will dictate your strategy. What sort of risk can you tolerate?Getting an understanding of your own attitude to risk will help you create a strategy that reflects this.

4. Start budgetingIt’s
not sexy. It’s not even remotely interesting. But budgeting is the only
way to ensure you’re able to balance your income and expenses. It
allows you to see where you’ve been spending your money and helps you to
plan for bigger expenses down the line.There’s good budgeting software
available, such as this budget planner and this spreadsheet tool. Make
sure to set this up even before you start looking for a property.

5. Create a purchase planWhat
does an ideal purchase plan look like? It should facilitate your goals
of growing your portfolio to a point where it’s producing the growth or
income you’re aiming for. It should serve as a structure for you to stay
in the game.Here’s an example of a purchase plan you can follow:Define your strategySet up your criteriaDo your researchCull your listGet appraisalDo your due diligenceMake and offer and negotiate

6. Be informedUse
the tools available to you to make an informed decision. Knowing the
market can be key to making the right investment choice.Being
informed also means being wary of get rich quick schemes and property
peddlers. If someone is promising you guaranteed returns and overnight
riches, walk away; the only person getting rich is them.There’s no such
thing as a property psychic and while there are tried and true methods
to research, no one can make guarantees. Understanding your tolerance
for risk will help you shape how much you’re willing to take on over the
shorter and longer term.

7. Stay focusedMake sure you stay focused. Investing in property is a business decision, not an emotional reaction.Get clear about what you want to achieveSet a date as to when you want to achieve this goalIdentify milestones you need to do to get to your goalsIt’s easy to get overwhelmed when you’re starting something new and as massive as property investing.But
don’t give up. Just imagine in 10 years, if you buy the right
properties this year, you could be sitting back, feeling happy, secure
and even proud that you bought properties that more than doubled their
values while your peers and everyone else wishes they’d bought back in
the day.How good would that feel?